Trusts Law Flashcards
1
Q
Define an express trust and its key components.
A
An express trust is a trust that the settlor expressly intends to create. Key components include a valid declaration of trust, the transfer of assets to the trustee, identification of trustees, property, beneficiaries, and the powers and duties of the trustees.
2
Q
Describe the purpose of a declaration of trust.
A
A declaration of trust serves as an instruction manual for trustees, outlining how to manage the trust and specifying who will benefit from it. It must identify the trustees, the property held in trust, the beneficiaries, and the powers and duties of the trustees.
3
Q
Define a fixed interest trust in the context of a declaration of trust.
A
A fixed interest trust is a type of trust where the beneficiaries and their respective shares are clearly defined, allowing for specific distributions, such as equal shares among a group identified as beneficiaries.
4
Q
Describe how beneficiaries can be identified in a fixed interest trust.
A
Beneficiaries in a fixed interest trust can be identified as a group or class of individuals rather than by name, as long as the group can be identified with sufficient certainty.
5
Q
Define the term ‘settlor’ in the context of trusts.
A
A settlor is the person who creates a trust, transferring property to a trustee to hold for the benefit of another party.
6
Q
Describe the importance of certainty of intention in the creation of a trust.
A
Certainty of intention is crucial because it determines whether the settlor intended to create a trust, requiring clear language that imposes a duty on the trustee to hold property for someone else.
7
Q
Describe the historical purpose of equity in English law.
A
Equity was developed to mitigate the rigours of the common law, which could lead to injustice due to its inflexible application. It aimed to do justice by focusing on the consciences of the parties involved and providing more options for redress to victims of wrongs.
8
Q
How does equity differ from common law in terms of remedies?
A
While common law primarily offered damages as a remedy, equity developed new remedies that could be granted at the court’s discretion, especially when damages were deemed inadequate to address the injustice.
9
Q
Describe the implications of gifting shares in terms of ownership and dividends.
A
When shares are gifted, the original owner relinquishes all interest in the shares, transferring absolute ownership to the recipient. Consequently, the company will direct any dividends to the new owner.
10
Q
What is a covenant
A
An agreement or promise to do or provide something OR to refrain from doing something
11
Q
Describe the role of the settlor in a trust.
A
The settlor is the person who creates a trust, selecting the trustees, beneficiaries, and the property to be held in the trust, while also laying down the terms of the trust, often referred to as the declaration of trust.
12
Q
How does a trust typically function in terms of property management?
A
In a trust, the settlor transfers legal title of the property to the trustee, who manages it according to the terms set out in the trust document for the benefit of the beneficiaries.
13
Q
Describe the distinction between legal title and equitable title in a trust.
A
Legal title is held by the trustee, who appears as the absolute owner to the outside world, while equitable title belongs to the beneficiary, representing the real value of the trust.
14
Q
How does the role of a trustee differ from that of a beneficiary in a trust arrangement?
A
The trustee holds legal title to the trust property and manages it, while the beneficiary holds equitable title, which entitles them to the benefits and value of the trust property.
15
Q
Describe the main duty of trustees regarding the trust fund.
A
Trustees are responsible for looking after the trust fund until the beneficiaries become entitled to it, which includes considering investments to grow the fund rather than just safeguarding the property.
16
Q
How should trustees approach the management of the trust fund in relation to inflation?
A
Trustees should consider investing the trust fund in assets that may increase in value faster than inflation, rather than simply keeping the funds in a low-interest account.
17
Q
Describe the nature of property in a trust over time.
A
The form of property in a trust may change during the trust’s duration, and by the end of the trust, the property held may differ significantly from what was initially placed in the trust by the settlor. However, it is always referred to as ‘trust property’, ‘trust fund’, or ‘trust capital’.
18
Q
Define the difference between a trust and a gift.
A
A trust allows the owner of property to retain some control over it, whereas a gift transfers complete ownership to the recipient, leaving the donor with no control over the property after the gift is made.
19
Q
Describe the primary function of trusts in property management.
A
Trusts serve as a vital legal tool to separate the management of property from the enjoyment of that property.
20
Q
Define express trusts and their two main classifications.
A
Express trusts are those that the settlor expressly intends to create, classified into trusts that benefit individuals and trusts designed to achieve a specific purpose.
21
Q
Define a constructive trust and its purpose.
A
A constructive trust is an implied trust established to achieve a fair result between parties, often used when it would be unjust to allow the legal owner to fully enjoy the property they hold.
22
Q
Describe a scenario where a constructive trust might be imposed.
A
In a situation where an unmarried couple, Ulrich and Vivienne, contribute equally to a house purchase but the house is solely in Ulrich’s name, a constructive trust may be imposed to ensure Vivienne receives an equitable interest in the property due to her contributions.
23
Q
Describe the implications of using precatory wording in a declaration of trust.
A
Using precatory wording, such as expressing a hope or expectation, does not create a legal trust. Instead, it is interpreted as a gift, meaning the recipient takes full ownership of the property without any obligation to distribute it as hoped.
24
Q
How does the law handle situations with no certainty of intention in property transfers?
A
In cases where there is no clear evidence of the transferor’s intention, the law relies on various presumptions to determine the appropriate legal outcome regarding the property transfer.
25
Describe the issue with declaring a trust for 'the bulk' of an estate.
The declaration is invalid because 'the bulk' lacks specificity, making it impossible to determine the exact amount or what it includes.
26
How does the concept of 'residue' in a will provide certainty in a trust declaration?
The 'residue' refers to the portion of the estate remaining after all debts, taxes, and specific legacies are settled, allowing for a clear and calculable trust.
27
Describe the implications of a declaration of trust that is silent about the shares of each beneficiary.
If a declaration of trust is silent about the shares of each beneficiary, it is assumed that those shares are equal among the beneficiaries.
28
How does the phrase 'generous amounts' affect the certainty of beneficial interests in a trust?
The phrase 'generous amounts' does not provide enough guidance on the distribution amounts, leading to uncertainty in the beneficial interests for the beneficiaries.
29
Describe the concept of 'conceptual certainty' in the context of trusts.
Conceptual certainty requires that the settlor must describe the class of beneficiaries using clear and objective concepts, allowing for a complete and definitive list of beneficiaries to be drawn up.
30
How does the term 'friends' create uncertainty in a trust context?
The term 'friends' lacks a universal definition, leading to ambiguity about who qualifies as a beneficiary, as it could refer to various interpretations such as social media contacts or regular acquaintances.
31
Describe the role of trustees in a discretionary trust.
Trustees have the discretion to decide which beneficiaries, such as cousins, will receive trust property and in what shares, ensuring that the individuals they distribute to fall within the defined class of beneficiaries.
32
Define the certainty of objects test in the context of discretionary trusts.
The certainty of objects test for discretionary trusts is known as the 'given postulant' test, which requires trustees to identify whether an individual qualifies as a beneficiary without needing a complete list of all potential beneficiaries.
33
Define the beneficiary principle in the context of trusts.
The beneficiary principle states that in order for a trust to be valid, it must be for the benefit of individuals, with certain exceptions.
34
Describe the implications of having no certainty of objects in a trust.
If there is no certainty of objects, or if a discretionary trust is administratively unworkable or capricious, a resulting trust will arise in favor of the settlor.
35
Describe the key difference between proving an oral declaration of trust and a documentary declaration of trust.
Evidence of B’s subjective intentions and subsequent conduct are admissible for proving an oral declaration of trust, while they are inadmissible for proving a documentary declaration of trust.
36
How must declarations of trust over land comply according to the Law of Property Act 1925?
Declarations of trust over land must be manifested and proved by some writing signed by a person who is able to declare such trust, as per s 53(1)(b) of the Law of Property Act 1925.
37
Describe the key components required for a valid trust declaration.
A valid trust declaration requires certainty of intention, certainty of subject-matter (trust property and beneficial interest), and certainty of objects. Additionally, it must adhere to the beneficiary principle and the perpetuity period, along with formalities if the trust involves land.
38
How does the formal requirement of s 53(1)(b) LPA 1925 affect the validity of a trust over land?
The formal requirement of s 53(1)(b) LPA 1925 mandates that a trust over land must be evidenced in signed writing, which must include all material terms of the trust, such as the trustee, trust property, beneficiaries, and their interests. Failure to meet these requirements can invalidate the trust.
39
Describe the two methods of constituting an express lifetime trust.
The two methods are: (a) the settlor appoints themselves as trustee for the beneficiary by making a valid declaration of trust, or (b) the settlor appoints someone else as the trustee and must also transfer legal title in the trust property to that trustee.
40
Define what it means for a trust to be 'constituted'.
A trust is said to be 'constituted' when the settlor has made a valid declaration of trust and has put assets into the trust, after which the settlor cannot change their mind.
41
Describe the requirements for transferring legal title of land into a trust.
To transfer legal title of land into a trust, the settlor must execute a deed that satisfies the Law of Property (Miscellaneous Provisions) Act 1989, which requires the document to be stated as a deed and signed by the settlor in the presence of a witness. If the land is registered, Form TR1 is used.
42
Define what a deed is in the context of transferring property into a trust.
A deed is a legal document that must be stated to be a deed and signed by the person making it in the presence of a witness, as per the Law of Property (Miscellaneous Provisions) Act 1989. It is necessary for transferring legal title of property, such as land, into a trust.
43
Describe the process for transferring shares in a private company to a trustee.
To transfer shares in a private company to a trustee, the settlor must execute a stock transfer form, typically following the format in Schedule 1 of the Stock Transfer Act 1963. The settlor then provides the executed stock transfer form and the relevant share certificate to the trustee or sends it directly to the company. The company's secretary will register the trustee as the new shareholder.
44
Define the role of a share certificate in the transfer of private company shares.
A share certificate serves as evidence of ownership for shares in a private company. It confirms the owner's rights and is necessary for the transfer process, as it must be provided along with the executed stock transfer form to either the trustee or the company to facilitate the registration of the new shareholder.
45
Describe the general rule regarding volunteers in the context of express trusts.
The general rule is that 'equity will not assist a volunteer,' meaning that a beneficiary who has not provided consideration for the transfer of property cannot enforce the terms of the trust if the proper transfer rules have not been followed.
46
How does the maxim 'equity will not assist a volunteer' affect the creation of trusts?
This maxim implies that if a settlor does not properly adhere to the transfer rules for the property intended to be held in trust, a trust cannot be constituted, as equity cannot help beneficiaries who are considered volunteers.
47
Describe the significance of transfer documents in determining whether property has been put 'beyond recall' in a trust.
The transfer documents must be executed by the settlor, and if they remain in the settlor's possession or control, it indicates that the settlor has not satisfied the every effort test. If the documents are no longer with the settlor, the test is generally considered satisfied.
48
How does equity treat a trust when the settlor has not fully satisfied the every effort test but intended to create a trust?
Equity may still regard the trust as valid if it would be unconscionable for the settlor to back out of creating the trust, as illustrated in the case of Pennington v Waine [2002] EWCA Civ 227.
49
Describe the implications of Megan's decision regarding her wedding ring in relation to trust law.
Megan's decision to leave her wedding ring to her granddaughter Polly in her will indicates a change of mind, which prevents the application of the rule in Strong v Bird to create a trust for Olivia. This shows that a clear intention to change the beneficiary can negate the establishment of a trust.
50
How does the appointment of trustees work when a settlor includes themselves and another party?
When a settlor appoints themselves and another person as trustees, both parties are responsible for managing the trust. This arrangement allows for shared decision-making and oversight of the trust fund, ensuring that the settlor's intentions are carried out collaboratively.
51
Define the key components necessary for a valid express trust.
A valid express trust requires certainty of subject matter (trust property and beneficial interest), certainty of objects (fixed or discretionary), certainty of intention, and compliance with formalities, especially for trusts over land.
52
Describe the difference between a fixed interest trust and a discretionary trust.
A fixed interest trust provides beneficiaries with a defined share of the trust property, determined by a complete list test, while a discretionary trust allows the trustee to decide how to distribute the trust property among beneficiaries, requiring administrative workability and a given postulant test for certainty.
53
Describe the importance of understanding a beneficiary's entitlement under a trust.
Understanding a beneficiary's entitlement is crucial to determine whether their interest is unconditional or conditional, when they can call for trust property, and what they are entitled to.
54
Define the types of interests that can exist under a trust.
There are different types of beneficial interests under trusts, which can vary based on the terms of the trust, including unconditional and conditional interests.
55
Describe the difference between a capital return and an income return in the context of property.
A capital return relates to the underlying value of the property, indicating an increase in value over time, while an income return is the regular money received from the property, regardless of any capital gain.
56
Define the terms 'absolute interest' and 'limited interest' in relation to beneficiaries.
An 'absolute interest' refers to a beneficiary's interest in capital, meaning they have a claim to the underlying value of the property, whereas a 'limited interest' refers to a beneficiary's interest in income only, meaning they receive regular payments without a claim to the property's capital value.
57
Describe the implications of a beneficiary turning 18 years old in relation to a trust.
When a beneficiary turns 18, it does not automatically terminate the trust. The trustees continue to hold the property on trust until the beneficiary requests the transfer of the trust property.
58
Define a contingent interest in the context of trusts.
A contingent interest is a type of beneficial interest that depends on the occurrence of a future event that may or may not happen, or it may pertain to a beneficiary who is not yet in existence.
59
Describe the role of a remainderman in a trust.
A remainderman, like Adam, has a vested interest in trust capital that is postponed until the current beneficiary's right to enjoyment expires, such as upon Yara's death.
60
How does the postponement of a vested interest affect the distribution of trust property?
The postponement of a vested interest means that the remainderman will not receive any trust property until the current beneficiary, Yara, dies, ensuring that the trust property is available to generate income for Yara during her lifetime.
61
How should trustees evaluate the suitability of an investment like shares in a company?
Trustees should first determine if investing in shares is appropriate for the trust, and then assess whether the specific shares, such as those in RSA Insurance plc, are a good choice based on factors like the size of the trust fund, the proposed investment size, and associated risks.
62
Describe the obligations of trustees when exercising discretion in favor of a beneficiary.
Trustees may be obliged to give reasons and advance warning if a particular beneficiary has a legitimate expectation that discretion will be exercised in their favor, especially if they have received benefits in the past.
63
How are beneficiaries entitled to access information regarding a trust?
Beneficiaries are entitled to see the trust document or will that created the trust, the trust accounts, and a schedule of trust investments.
64
How should trustees handle beneficiary requests for trust documents?
Beneficiaries are entitled to see the trust document, accounts, and schedules of investments, but trustees are not required to disclose documents that record the reasons for their decisions.
65
Describe the limitations beneficiaries have regarding access to trustee decision documents.
Beneficiaries cannot demand sight of documents that record the decisions taken by trustees, such as minutes of meetings. If they wish to see such documents, they must apply to the court.
66
How are decisions made by trustees in the absence of express provisions in a trust deed?
In the absence of express provisions, trustees may agree among themselves on how to make decisions, but they must act in the best interest of the beneficiaries and cannot delegate all decision-making to one trustee without proper consent.
67
Describe the impact of inflation on the purchasing power of money over time.
Inflation causes the purchasing power of money to decrease over time. For example, if £10,000 is saved and not invested, after 10 years, it may only have the equivalent purchasing power of £7,500 due to inflation.
68
Define the term 'additional income' in the context of investments.
Additional income refers to the regular receipt of money derived from capital investments, such as interest earned from savings or returns from other investment vehicles.
69
Describe the standard of care that trustees must adopt when making investment decisions.
Trustees must adopt a standard of care that involves thorough purchasing and reviewing of investments, ensuring they act impartially between beneficiaries, and securing the best return for them.
70
How should trustees tailor their investment strategy for a trust?
Trustees should consider the interests and circumstances of the beneficiaries, the duration of the trust, and whether the investments are for the short-term or long-term.
71
Describe the expected outcomes of an investment.
An investment is expected to produce an income return, a capital return, or both.
72
How can diversifying investments in shares reduce risk?
Spreading investments across companies in different sectors and geographies can help mitigate risk, as it reduces the impact of poor performance in any single area.
73
Describe why purchasing a 'run-around' car is not considered a valid investment for trustees.
Purchasing a 'run-around' car is not considered a valid investment because these cars depreciate in value over time and do not generate income.
74
Define the conditions under which trustees may make unsecured loans.
Trustees may only make unsecured loans if the trust document contains a very clear, express provision allowing for such actions, as historically, unsecured loans are not classified as investments.
75
Describe the statutory duties of trustees when purchasing investments.
Trustees must adhere to the 'standard investment criteria' as outlined in section 4 of the TA 2000, ensuring that the investments are suitable for the trust through a two-step process.
76
How can trustees ensure they fulfill their duties effectively?
Trustees should actively monitor the actions of co-trustees, correct any misconduct, and take action if they are aware of any breaches of trust. They can seek advice from experts but must make their own decisions.
77
Describe the responsibilities of trustees when considering investments according to the TA 2000.
Trustees must obtain and consider proper investment advice from a qualified individual unless they reasonably conclude that it is unnecessary or inappropriate. They must act reasonably in selecting an adviser and retain the ultimate decision-making power regarding investments.
78
How should trustees exercise their investment powers as per the TA 2000?
Trustees must exercise their investment powers personally, ensuring they act with reasonable care and skill in the circumstances, while also considering advice from qualified financial advisers.
79
Describe the importance of securing an appointment on the board of directors for trustees considering shareholding retention.
Securing an appointment on the board allows trustees to oversee and influence the management of the company, ensuring their interests and those of the beneficiaries are represented.
80
How can diversification benefit beneficiaries in a trust?
Diversification protects beneficiaries by spreading investments across various sectors, reducing the risk associated with any single investment performing poorly, especially in volatile sectors like technology.
81
Describe the responsibilities of trustees regarding the investment policy statement.
Trustees must prepare a written policy statement that guides how the agent should manage assets in the best interests of the trust, exercising reasonable care and skill in its formulation.
82
How should trustees monitor the agent's compliance with the investment policy?
Trustees are required to regularly review the arrangements with the agent, assess compliance with the policy statement, and consider revising the policy or terminating the agent's retainer if necessary.
83
Describe the responsibilities of trustees when selecting or reviewing investments.
Trustees must consider the standard investment criteria, obtain proper advice, review investments periodically, seek the best financial return, and treat all beneficiaries impartially while exercising reasonable care and skill.
84
How can trustees manage their investment functions effectively?
Trustees can appoint a suitably-qualified agent in writing, provide a written policy statement, and review the agent's actions periodically, while not being liable for the agent's defaults.
85
Describe the role of a trustee in managing trust property.
A trustee has all the powers available under common law to manage property, appearing to the outside world as the absolute owner of the trust property, while being responsible for administering it for the benefit of the beneficiaries.
86
Define the fiduciary relationship in the context of trusts.
The fiduciary relationship involves a trustee's duties to act in the best interests of the beneficiaries, with strict obligations designed to prevent the trustee from prioritizing their own self-interest over the interests of the trust.
87
Describe the responsibilities of a fiduciary in relation to their principal.
A fiduciary must act in the best interests of their principal, avoiding conflicts of interest and unauthorized personal profits. They are required to provide single-minded loyalty and cannot profit from their position or use the principal's property for personal gain.
88
How can a fiduciary breach their duties?
A fiduciary can breach their duties by engaging in actions such as selling property to the trust at an inflated price, paying themselves excessive remuneration from trust funds, or using investment tips for personal benefit instead of for the trust.
89
Describe the self-dealing rule in the context of trusts.
The self-dealing rule prohibits a trustee from selling to or purchasing property from the trust, as it creates a conflict of interest. The trustee, acting as both seller and buyer, may have opposing interests that can harm the beneficiaries.
90
How does a conflict of interest arise for a trustee in a self-dealing situation?
A conflict of interest arises when a trustee attempts to sell trust property to themselves or purchase property from the trust, as they have competing motivations: maximizing the sale price for the trust while minimizing the purchase price for their own benefit.
91
How does the discretionary power of trustees change when an adult contingent beneficiary reaches the age of 18?
When an adult contingent beneficiary reaches the age of 18, the trustees' discretionary power to apply income for their maintenance, education, or benefit ceases.
92
How should a settlor approach the selection of trustees for a trust?
The settlor must consider who can best discharge the duty of a trustee, whether it be a family member, an independent professional, or a combination of both.
93
Describe the statutory powers related to the appointment and removal of trustees.
The statutory powers for the appointment and removal of trustees are outlined in the Trustee Act (TA) 1925 and the Trusts of Land and Appointment of Trustees Act (TLATA) 1996.
94
How can a trustee retire according to the provisions mentioned?
A trustee can retire by using provisions in the trust instrument, if it contains an express power for retirement, or by following Section 36(1) of the TA 1925, which requires the appointment of a new trustee.
95
Describe the circumstances under which a trustee can be removed or replaced.
A trustee can be removed or replaced under the following circumstances: if the trustee is dead, remains outside the UK for more than 12 months, desires to be discharged, refuses to act, is unfit to act, is incapable of acting due to mental or physical incapacity, or is a minor.
96
How is the replacement of a trustee typically carried out?
The replacement of a trustee is typically carried out by the person nominated in the trust instrument to exercise the power of removal. If no such person is nominated, the continuing trustees, including a retiring trustee willing to join in the appointment, can effect the replacement.
97
Describe the process for appointing a new trustee under the TA 1925.
A new trustee can be appointed under section 36(1) of the TA 1925, typically by a deed, especially when there is no nominated person in the trust instrument. This allows for the automatic vesting of the trust property under section 40.
98
How can beneficiaries influence the retirement of a trustee?
Beneficiaries, such as Ivan, Juliette, and Kevin, who are absolutely entitled to the trust property, can collectively force a trustee to retire if they have fallen out with that trustee.
99
Describe the situation involving Andrew and Tara as trustees of a discretionary trust.
Andrew and Tara are trustees of a £4 million discretionary trust but feel unqualified for the role. They wish to appoint two professionals from their friends Charles, Daniel, and Esther to assist them, as the trust document does not allow for additional trustees.
100
How should Andrew and Tara proceed to appoint new trustees for the trust?
Andrew and Tara need to select two out of their three friends—Charles, Daniel, and Esther—to act as co-trustees. After selecting, they must execute a deed to formalize the appointment of the new trustees.
101
Describe the role of a trustee in managing a trust.
A trustee is responsible for managing the trust property according to the terms set by the settlor, ensuring that the beneficiaries receive their entitlements while also considering their changing circumstances.
102
How can trustees adapt to changing circumstances of beneficiaries?
Trustees may have the flexibility to provide beneficiaries with access to trust property earlier than stipulated, especially if they believe it aligns with the settlor's intentions and the beneficiaries' immediate needs.
103
Describe the conditions under which trustees can use income for the benefit of minor beneficiaries according to s 31 of the TA 1925.
Trustees can use income for the maintenance, education, and benefit of minor beneficiaries if there is no contrary provision in the declaration of trust and if the minor has some kind of interest in income, whether vested or contingent, without any prior interests to income.
104
How do life interest trusts affect the distribution of income to beneficiaries?
In life interest trusts, the trustees must pay income to the life tenant, who has a prior interest to income, meaning they receive income during their lifetime before any remainder beneficiaries.
105
Describe the duty of trustees regarding adult contingent beneficiaries under Section 31 of the TA 1925.
Trustees must pay trust income to adult contingent beneficiaries as it arises, pending the vesting of their beneficial interests.
106
Describe the primary responsibility of a trustee in a trust.
The trustee is under a duty to look after and invest property for the benefit of others.
107
Describe the conditions under which trustees can advance capital to beneficiaries.
Trustees can advance capital to beneficiaries if there is no contrary provision in the declaration of trust, the beneficiary has an interest in capital (either vested or contingent), and the payment is for the beneficiary's advancement or benefit.
108
How does a life interest trust affect the interests of beneficiaries in capital?
In a life interest trust, the life tenant (e.g., Rajesh) is only interested in income, while the remainderman (e.g., Saleem) has an interest in capital. This means trustees cannot pay capital to the life tenant without the consent of the remainderman.
109
Describe the conditions under which trustees can advance capital from a trust fund.
Trustees can advance capital from a trust fund up to the value of a beneficiary's presumptive share, as per s 32 of the TA 1925. However, they are not obliged to make such advancements and can choose not to pay for specific requests, such as university fees.
110
How does the advancement of trust capital affect a beneficiary's entitlement to trust capital?
The advancement of trust capital is taken into account when the beneficiary becomes entitled to the trust capital, meaning that any amounts advanced will reduce the total capital available to the beneficiary when they reach entitlement.
111
Describe the limitations on trustees regarding the purchase of items for beneficiaries.
Trustees cannot buy items like a jet ski for beneficiaries under s 32 of the TA 1925, as such items are not considered for the advancement or benefit of the beneficiary.
112
How can trustees manage capital for beneficiaries under different trust declarations?
Trustees can advance capital to a beneficiary without needing their consent if the beneficiary does not have a prior interest. For beneficiaries under 18, income can be applied for maintenance, education, or benefit, while those 18 or over should already be receiving income.
113
Describe the role of trustees in a trust.
Trustees are the managers of the trust, responsible for observing the terms of the trust and acting in the best interests of the beneficiaries.
114
How do beneficiaries enforce their rights in relation to trustees?
Beneficiaries can complain to the court if the trustees commit a breach of trust, thereby enforcing their rights.
115
Describe the role of express provisions in a declaration of trust.
Express provisions in a declaration of trust allow the settlor to exclude, modify, or amplify the general law regarding the trust, including limiting or excluding the trustees' liability for breaches of trust.
116
How should a trustee demonstrate their duty of care when managing a trust?
A trustee must take all precautions that an ordinary prudent man of business would take in managing similar affairs of his own, as established in the case Speight v Gaunt (1883).
117
Describe the responsibilities of a newly appointed trustee regarding past breaches of trust.
A newly appointed trustee should inquire into the past business of the trust to ensure there have been no breaches and take appropriate action to remedy any identified breaches.
118
How should a trustee manage chattels held on trust?
A trustee should ensure that a proper inventory of the chattels held on trust is drawn up.
119
Describe the responsibilities of trustees when managing a trust.
Trustees must be personally active in the running of a trust and cannot delegate decision-making to others, except in specific statutory circumstances. They must not leave matters solely in the hands of co-trustees without proper oversight.
